A Comparative Study of the Control of Unfair Contract Terms: Assessing the Feasibility of Expanding Judicial Review in Iranian and Iraqi Law

Abstract

The transformation of contractual relations and the rapid expansion of standard-form, adhesion, banking, and electronic contracts have increasingly challenged the classical assumption that contracting parties enjoy equal bargaining power and genuine freedom of negotiation. In many contemporary transactions, one party possesses superior economic, informational, or technical power and predetermines the contractual terms, while the other party is effectively limited to accepting or rejecting the agreement as a whole. Under such circumstances, contractual provisions may be formally valid yet substantively distort the balance between the parties’ rights and obligations. This study adopts a descriptive-analytical and comparative approach to examine the mechanisms for controlling unfair contract terms in Iranian and Iraqi law and to assess the feasibility of expanding judicial review in Iranian contract law. The findings indicate that Iranian law currently addresses unfair terms through a fragmented set of doctrines, including invalid conditions, public order, the no-harm principle, prohibition of abuse of rights, consumer protection rules, and contractual interpretation, while lacking a comprehensive and explicit framework for identifying and modifying unfair terms. In contrast, Iraqi law provides a more direct basis for judicial intervention in adhesion contracts by allowing courts to modify or neutralize oppressive terms. The comparative analysis demonstrates that Iranian law possesses sufficient doctrinal capacity to develop a more coherent system of judicial review, provided that such intervention is governed by clear criteria, including absence of meaningful negotiation, significant contractual imbalance, lack of transparency, abuse of bargaining power, and inconsistency with good faith. A differentiated system of remedies, including nullity, unenforceability, restrictive interpretation, and judicial modification, could enhance contractual justice while preserving contractual autonomy and legal certainty.